About this Show

Nightly Business Report

News/Business. (2012) New. (CC) (Stereo)

NETWORK
PBS

DURATION
00:30:00

RATING
G

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Channel 80 (561 MHz)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
528

PIXEL HEIGHT
480

TOPIC FREQUENCY

U.s. 6, S&p 5, Europe 5, Nbr 5, Apple 4, Taylor 3, China 3, Morgan Stanley 3, Zuckerberg 3, Romney 2, Moody 2, Ben Bernanke 2, Darren Gersh 2, Mankiw 2, Espn 2, Moody 's 2, Citi 2, Allison Worrell 2, New York 2, Us 2,
Borrow a DVD
of this show
  PBS    Nightly Business Report    News/Business.   
   (2012) New. (CC) (Stereo)  

    September 11, 2012
    6:30 - 7:00pm PDT  

6:30pm
>> this is n.b.r. >> tom: i'm tom hudson. susie is off tonight. apple's expected to debut the i- phone 5 tomorrow. it may be technology's next big thing, but its influence extends well beyond apple. from freight to fashion to semiconductors-- three major bellwethers have warned recently about their financial forecasts. is corporate profit growth cracking? and another warning about the fiscal cliff-- find a solution or risk a lower credit rating for america. that and more tonight on nbr! in less than 24 hours, we'll get our first peak at apple's new phone, dubbed iphone 5. expectations are high it will offer everything from a larger
6:31pm
screen to a panoramic camera. nevertheless, shares of apple dipped slightly today in advance of the announcement. and, as suzanne pratt reports, all investors should be watching how the stock performs. >> reporter: it's known as the "apple effect." apple's stock is up; so is the broader market. apple shares fall; major averages drop, too. the world's most valuable company makes up nearly 5% of the s&p 500 index. thanks to apple's huge gain this year, the s&p is up 14%. on the other hand, the apple-less dow is up only 9%. and don't forget the tech-heavy nasdaq. apple accounts for 13% of the weighting in that index. thanks to the shine in apple shares, the nasdaq is up 19% this year. with apple's outsized influence on the market, a warm welcome for iphone 5 tomorrow might make more than apple shareholders happy. but some market pros say it's a
6:32pm
stretch to think apple has kidnapped the stock market. >> i would not argue that, as apple goes, so goes the market. i think there's a lot of other sectors that we're also paying attention to. and granted, we've been overweight the technology sector, but we're also overweight things like materials and the consumer discretionary sectors. >> reporter: still, even wren concedes apple's effect on the market is more than mathematical; it's also emotional. which brings us back to the iphone 5, likely to get a good reception tomorrow from techies. but if history is any guide, investors might sell apple shares when the phone debuts. >> we're not so sure to what extent the near-term impacts are going to apple be from a stock perspective. but, frankly, we continue to like the stock right now, despite the fact that we've seen substantial appreciation year to date. >> reporter: of course, the overall market can still go up, even if apple's shares poop out. still, such gains also depend on europe, the federal reserve, and
6:33pm
the list goes on. suzanne pratt, nbr, new york. >> tom: meantime, another high- profile tech company was out talking late today. facebook's c.e.o mark zuckerberg made his first public appearance since his company sold stock to the public in may. shares of facebook trade at about half the price they were when it went public. they were $38 a share that first day; today, they closed below $19.50 after a 3.3% gain today. this afternoon, zuckerberg said the long-term for the company rests with its mobile strategy. >> tom: max wolf is a senior analyst and chief economist at greencrest capital. joining us tonight from the nasdaq. so max, how about it. do you think the markets
6:34pm
understatementing facebook? >> well, i slirt hope so, especially for those people who bought it around $38. i know they think so soo. it's disheart ening to see a lesser focus on the investor community. on the our hand i think it was good to see zuckerberg go out there, be honest, adegrees the short falls, the quote unquite disappointment around the i. p. o., which i know was a $50 billion market loss, was fairly widely felt. to begin the process hopefully of rebuilding faith and rebuilding communication really between the general public, particularly tin vising public, and this company, the executive group. >> tom: so let's talk about apple and facebook as a pair here, because these two tech companies certainly are high profile, but different trajectorys for their stocks, around el close to all-time highs, facebook half the price when it went public. are their business outlooks that different? >> you know, they're in a different place, so apple defines the sort of beat the high expectations game. we expect them to do very well
6:35pm
in the iphone 5 tomorrow. just think of how much we're talking about it in advance, this haas always been an area of particular strength for apple, they've been much beloved and widely followed. they have begun to tie up a little with facebook, the one thing they have in common is they both have their eyes on google and they both feel competitively threatened by going skpel that is going to push them together, and we're going to see a lot discussion about fast, smooth, native applications from facebook on the iphone 5 that we're going to learn all about tomorrow. >> tom: with that in mind how closely tied are the fates of these companies and what can they learn from one another? >> i don't know if they're all that closely tied. to some extent i think apple gets a short-term advantage from facebook, facebook gets an advantage because everybody does in today's market beribbing off on al apple. facebook could do well even if apple didn't. certainly vice averse a. apple has grown profits more rapidly, facebook has grown
6:36pm
revenues more rapidly, it's a larger company so it should have a harder time doing that. so its success has not rubbed off on facebook. they are try ang ultimating on going skpel may might drive them further together. >> tom: do you own facebook or apple shares? >> i do not. >> tom: max wolff, with greencrest capital at the mass. dack. thank you. before the markets learn if the federal reserve has any new ammo for the u.s. economy on thursday, tomorrow, a german court will rule if a european bailout fund squares with that country's constitution. it's seen as a key test for europe's strategy to deal with its debt troubles. ahead of the ruling, the dow industrial average hit its highest intra-day level since 2007. the dow gained 69, the nasdaq bumped up half a point, while the s&p gained about four. still ahead, it's more than just the cookies.
6:37pm
how the girl scouts are working on financial literacy, one badge at a time. now, from badges of distinction to black marks. more companies than usual have been issuing earnings warnings at this point in the third quarter. today, shares of british fashion house burberry fell more than 20% after warning full-year profits will be disappointing. as erika miller explains, we've heard from several well-known firms warning about the global slowdown. >> reporter: burberry's profit warning is not just a negative sign for luxury goods makers; it's part of a bigger trend suggesting the upcoming earnings season could be difficult one. the iconic brand famous for its signature plaid coats is feeling wind chill from china, as well as europe and the u.s.@rr; >> the chinese economy is slowing down, manufacturing there is slowing down. there's a lot of concern with the european debt crisis, and even within the united states, with it being an election year. >> reporter: but burberry says it has been talking to other luxury goods makers, so it knows it's not alone in seeing the
6:38pm
slowdown. as a result, luxury good stocks like lvmh, tiffany, and coach also fell today, although they didn't get hit nearly as hard as burberry. it's not just luxury firms getting hurt by the global slowdown. many other bellwether firms have said revenues are suffering due to weaker sales in china, europe and elsewhere. in the s&p 500, there have been 88 negative pre-announcements for th and only 20 positive ones. >> the number of negative pre- announcements we've received is the worst in over a decade. we've already seen analysts become very bearish on these companies. >> reporter: last week, chipmaker intel drastically reduced its sales forecast, warning consumers and businesses are buying fewer personal computers. the company also withdrew its full-year guidance, which is seen as a sign of extreme uncertainty. and fedex recently cut its earnings forecast due to slowing demand for global shipping. that firm is viewed as a
6:39pm
bellwether not just of the transportation sector, but also the broader economy as the third quarter winds to a close, more firms are expected to wave earnings warning flags. typically, companies like to get the bad news out of the way early, and that could mean more pressure on the stock market. erika miller, nbr, new york. >> tom: another warning today about the threat of the fiscal cliff. credit ratings agency moody's said today keeping the u.s.a.'s triple-a credit rating hinges on getting a deal in congress to cut the nation's massive debt load. if budget negotiations lead to specific policies cutting the
6:40pm
ratio of federal debt to gross domestic spending, then moody's says it will affirm the country's triple-a credit rating and change its outlook on u.s. debt back to "stable." if there's no deal to avoid the automatic spending cuts and tax increases, moody's said it will be forced to slash ratings. the warning did not hurt demand for government i.o.u.s. the treasury department had record demand for three-year notes auctioned off today. the federal reserve also has talked about the risks to the economy presented by the fiscal cliff. the central bank's policy makers begin a two day meeting tomorrow, not about the fiscal cliff, but rather monetary policy. one change expected to be discussed is whether the fed should promise to keep interest rates low into 2015. here's the interesting thing about that-- ben bernanke is unlikely to be fed chairman after his term expires in january 2014. darren gersh looks at who may lead the bank if there's a change in the white house in november. >> reporter: there are many jobs a new president gets to hand out, but few are as important or make for a more delicate transition than chairman of the
6:41pm
federal reserve. the first rule for governor romney or any other new president is simple-- don't pick a fed chairman who will make quick changes that will scare the markets. >> if you're thinking about a romney administration making a significant change that would be noticeable to anyone outside of, lets say economists or financial market professionals, we're probably all going to be disappointed. >> reporter: republicans have expressed some concern the current fed has been too cozy with the treasury and the obama administration. but that concern may fade after the election. >> i think you'd see a move away from that, so that's easy to say now, before someone has the reins of power. if... when they actually get the reins of power, they might actually prefer to have a more cozy relationship. >> reporter: the three men most often mentioned as likely romney fed picks are columbia business school dean glenn hubbard, harvard economist greg mankiw, and stanford economist john taylor. >> among those, i think mankiw would be the most activist and taylor would be the least activist.
6:42pm
mankiw would perhaps be the most likely to consider q.e. right now; taylor would be opposed. >> reporter: taylor has criticized bernanke for the fed's aggressive bond buying and is considered an inflation hawk. while hawks may be popular during an election, actually picking one for fed chairman may not sit well with a new president concerned about boosting growth. for his part, hubbard has given few signals about monetary policy, though he has praised ben bernanke and done a lot of work on the importance of fixing mortgage markets. >> if the fed were to do q.e.-- quantitative easing-- in mortgages that could help any administration plan to refinance mortgages, the two could go together. >> reporter: of course, if romney wins, it is possible the former c.e.o. will offer up a surprise pick, choosing a business leader to run the fed instead of another academic. darren gersh, nbr, washington.
6:43pm
>> tom: a big payday for an irs whistle-blower. former u.b.s. banker bradley birkenfeld was awarded $104 million for helping the internal revenue service uncover details about the swiss bank's role in encouraging tax cheats. it's the largest award ever in the u.s. for a whistleblower. birkenfeld detailed illicit practices at u.b.s. those details lead the bank to cut a deal with prosecutors in 2009. u.b.s. paid $780 million and was forced to give up the names of 4,000 american taxpayers holding secret swiss bank accounts. the major stock indices edged higher awaiting tomorrow's german court ruling on the european bailout and the federal
6:44pm
reserve beginning its policy meeting. the s&p 500 continued trading in a very narrow range, finishing higher by a third of a percentage point. it continues to hover just below its post-recession high. one sign of economic demand-- imports into the u.s. in july were up slightly, eight tenths of a percent. but the slowdown overseas led to a 1% drop in american exports. the trade deficit grew slightly to $42 billion. trading volume held steady-- 664 million shares on the big board; ust under 1.6 billion on the nasdaq. the energy sector led the gains, nine tenths of a percent. the financial sector increased eight tenths of a percent; industrials gained a half- percent. among those fueling the gains in the financial sector were big banks. bank of america moved up to its highest price since the spring. b-of-a was the biggest percentage gainer of the dow jones industrial average, and continues to be the best performer among dow stocks this year. volume was very heavy-- more than 200 million shares as shares added 5.2%. meantime, morgan stanley and citigroup have a deal putting a
6:45pm
value on their joint venture brokerage, morgan stanley smith barney. the value of the business has been a sticking point between the two banks as morgan stanley moves to become the sole owner. today's deal values the brokerage at $13.5 billion. after the deal, citi's stake will be reduced to 35%. shares of both banks were higher on the deal. morgan stanley gained 3.9%; citi rose 2.6%. under today's deal, morgan will own all of the brokerage by the middle of 2015. it was a management change at asset manager legg mason that got its shares moving. the stock jumped 5.4% after announcing c.e.o mark fetting will step down october 1. the fund company has suffered from investor withdrawals from its funds while facing activist shareholders. higher insurance premiums may not be good news for customers, but they are for shareholders, at least today for travelers. shares were up 2.5% to a new high after the company said it continues to enjoy pricing power with business and individual insurance premiums. at an investor conference, the traveler's c.e.o said business
6:46pm
insurance rates were up an average of 7.7% so far this quarter. there was a spark in coal today, thanks in part to higher commodity prices and hope china will launch new infrastructure projects, leading to higher demand for steel. it takes a certain type of coal to make the steel, and stocks of those miners were stronger. alpha natural resources rose 7.7%; peabody gains 2.7%. four of the five most active exchange traded products were up, led by the 1.2% gain by the emerging markets fund. the s&p 500 volatility exchange traded note was down. it tends to move in opposite direction of the index. and that's tonight's "market focus."
6:47pm
>> tom: it's not just sox that have ralied as the finish considers more health for the economy, possibly announcing it as later this week. gold prices have also jumped, more than 4% since the beginning of this month. gold continues trading over $1700 an ounce, settling near its highest price since march. george gero is the president of global futures tonight at the nasdaq. has gold got answer head of itself since labor day? >> not really, actually it's up 10% for the year to date. while of course other markets are up 15%. so actually gold has maintained itself. i don't think it's gotten ahead of itself, but it's gotten an awful lot more investors interested just this month, ahead of the fomc meeting and ahead of other
6:48pm
developments in europe including german high court ruling. >> tom: we have seen an increase in trading volume, we've seen an increase in open interest in gold futures, essentially positions that are kept after a closing bell, after a settlement considered long investors here. are these characteristics potentially early signs of a bubble in gold? >> oh, i don't think it's a bubble. i think the people who have been buying gold have noticed other commodities, especially the grains, moving up to very high prices because of the drought worldwide, and it looks like between currency fluctuations, the interest rates maintaining themselves low, that means the weaker dollar and of course with a possible downgrade from moody's if there are no, there's no progress in congress and the senate, well, then of course people who own gold will maintain their gold positions. >> tom: well, how about that, if you do own gold at these levels and you've got some
6:49pm
profits, do you sell in anticipation perhaps of a lot of headline risk this week with the federal reserve announcement expected on thursday? >> i think traders may sell if there's disappointment. but long-term holders, people who live in italy, greece, portugal or even argentina who need gold to maintain purchasing power, and worried about their own currencys, are going to continue to invest in gold. >> tom: what about for americans, do you think, if there's a risk that the federal reserve wouldn't do enough or won't do it fast enough later this week, is there a risk to this gold rally we've seen as of late? >> yes, there is, because all the funds have filed in just this month, we've gone from 386,000 to 456,000 in open interest that we mentioned earlier. that means a lot of recent buyers, and they could be worried, and if they're worried they could sell very quickly, geling a downdraft in gold prices. >> tom: do you open positions
6:50pm
perhaps on that down draft? >> yes, every time you've had a major dip because of some headline problems, you've seen that gold has rebounded, and in the long term gold has been a good thing to own on big dips. >> tom: it has been resill yebl, no doubt about it. george gero with rbc capital markets. tomorrow on nbr, how hispanic business owners see some of the biggest issues this election year-- immigration and the economy. u.s. retail investors lack basic financial literacy. that was one of the conclusions of a government report last month designed to gauge our money smarts. women, specifically, were among the groups identified in the report as failing to grasp elementary financial concepts, like inflation and compound interest. narrowing that financial literacy gap is something the girl scouts are working on, badge by badge. allison worrell joined a couple of troops learning the value of a dollar. >> reporter: it may be after school, but there are some girls
6:51pm
here learning about something that they wouldn't necessarily hear about on a regular school day. >> thank you so much for being here today. as you know, one day, you guys will be out on your own. >> reporter: college is around the corner for these ambassador scouts, and while some of the girls plan on staying home when they start college, they'll still need to learn how to manage their money. brittney torres is a high school senior. she thinks teenagers have a lot to learn. >> many girls are very blind to what money can do, and think that their mommies and daddies are there to give them a handout. and i think it's important that they know how much they need to make. i've heard of people that didn't really learn about money until the end, and they're not responsible with it. >> reporter: financial education at the girl scouts goes much deeper than selling cookies. there are badges for making good spending choices-- money
6:52pm
manager, budgeting, comparison shopping, and having good credit. over their lifetime, women have bigger financial burdens than men because of longer life spans and higher healthcare costs. but they often earn less and often spend less time in the workforce. wealth manager meg green says she sees it when she talks to her clients. >> i have not heard a man say to me, "i'm so worried about living under a bridge." but i have heard many women say that they're afraid of living under a bridge, sadly, because they have not embraced their own finances, because they're relying on other people. >> reporter: but brownie scout kai zaragoza knows it's important, even if it's just knowing how much change you should get when you go shopping. >> yeah, they can trick you. and that's the whole thing-- if someone tricks you, you're going to be low in money.
6:53pm
>> they will be financially independent, comfortable, self- sufficient. we want them to learn before they make the mistakes; we don't want them to learn from their mistakes. >> reporter: the program is less than a year old, but with more than two million girl scouts, the next generation of young women will be building solid financial bridges, not worrying about living under them. allison worrell, nbr, mirimar, florida. >> tom: one of those costs that can creep up on any of us: pay tv-- cable, satellite or even on online service. there may be more ways than ever before to watch television, some not even on a tv, but increasingly, some of the most expensive content is no longer free to fans. here's rick horrow with this week's "beyond the scoreboard." >> ten years ago, no one would have expected marquee sporting events to air anywhere but on free broadcast tv-- abc, cbs, fox and nbc. however, with the penetration of cable and satellite tv, the practice is becoming common. these days, everything from major pro sports playoff games
6:54pm
to the b.c.s. national championship are televised on cable. the reason for the shift is the growing penetration of cable networks. for example, in 2012, there are 114 million households in the u.s. with a tv. nearly 99 million of those carry the two biggest sports networks, espn and espn 2. the 15 million household gap is offset by getting niche programming in front of targeted audiences on easily accessible networks. for the major media companies that own both terrestrial and cable sports channels, putting high-profile sports on the cable network also means increasing the subscriber fees they get from customers. if the goal is sacrificing casual fans in order to guarantee the die-hards, almost no event, except maybe the super bowl, is safe. but with ancillary dollars generated through cable, and with cable nearing its saturation point, its hard to argue with the strategy.
6:55pm
>> tom: finally tonight, we remember the victims and the heroes of september 11, 2011. from the pentagon, shanksville, pennsylvania, and ground zero, memorials and moments of silence were held, as they were across the country. a field of flags in charlotte, north carolina, to fire fighters in north liberty, iowa, honoring the almost 3,000 americans killed 11 years ago today. while this anniversary was marked by much less pageantry and more subtlety than a year ago, this day remains, as it will for every american who lived through it, a reminder of our fragility and our fortitude. thank you for joining us. good night.
6:56pm
captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org
6:57pm
6:58pm
6:59pm